Bank of America (BAC) – Get the Bank of America Corp report Thursday posted second-quarter profit of about half of what it earned a year ago and warned it was bracing for substantial loan losses amid the coronavirus pandemic that has temporarily stalled this that banks see as a looming wave of consumer and business loan defaults.

Bank of America said it earned $ 3.5 billion, or 37 cents per share, or about half of the $ 7.3 billion, or 74 cents per share, it earned during the same period of Last year. Analysts polled by FactSet had expected earnings of 28 cents a share.

Net interest expense income fell 3% to $ 22.3 billion from $ 23.1 billion a year ago.

Provisions for credit losses, a measure of what the bank expects to write off in bad loans and other investments, reached $ 5.1 billion, most of which is due to a $ 4 billion reserve build-up. dollars, the bank said. That was on top of the nearly $ 4.8 billion he had set aside at the end of his first quarter.

Calling it “the most tumultuous time since the Great Depression,” CEO Brian Moynihan said in a statement that “the strong results in the capital markets have provided an important counterweight to the impacts related to Covid-19 on our consumer activities” .

Indeed, the Charlotte-based bank highlighted record-breaking investment banking fees as compensation for losses induced by the pandemic, which generated net income of $ 726 million in its global banking unit. This is in addition to the bank’s $ 1.9 billion global markets division net profit, driven by $ 4.2 billion in sales and trading revenues.

However, the profits of the mainstream banking unit plunged 98% as the coronavirus shut down much of the U.S. economy and caused the loss of jobs for tens of millions of Americans. The bank’s net interest income fell 11% to $ 10.85 billion, while its non-interest income rose 5% to $ 11.48 billion.

Combined with billions in credit loss provisions, the quarterly profit snapshot suggests Bank of America is joining with other major banks in doing what it needs to do to prepare for the upcoming economic pain caused by the pandemic. – namely defaults by billions.

JPMorgan Chase (JPM) – Get the JPMorgan Chase & Co. (JPM) report, Wells Fargo (WFC) – Get the Wells Fargo & Company Report and Citigroup (VS) – Get the report from Citigroup Inc. have already set aside nearly $ 28 billion in provisions for credit losses. Wells Fargo alone earlier this week not only reported significantly lower revenue than last year’s figures but a booming balance sheet reflecting a rush for cash – and also massive provisions for credit losses in anticipation of defaults.

Shares of Bank of America were down 3.33% to $ 23.78 in Thursday’s trading.

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